I've ridden the entrepreneurial roller coaster -- as I've been a serial technology entrepreneur for the last 17 years. Entrepreneurship is a roller coaster ride, fast, wild, filled with highs and troughs. I wouldn’t trade it in for the world. During that time I’ve learned a lot and continue to learn about building great businesses, leadership and creating successful company culture. For me it all begins with the customer, they are at the center of everything we do as a company. I am equally passionate about building high performance teams that are centered on delighting customers & winning markets. I believe strongly in identifying early adoption customers, who are leaders in the industry we want to serve, that want to be in the front seat driving innovation together as “design partners”. I’ve been fortunate to have had many successful exits in my career, and never had to close down a company. My latest venture is AppFirst, where I’m CEO and co-founder. When I’m not in entrepreneur mode, I am managing my fantasy baseball team or cheering on my daughters as they strive to be the best they can be in the arts & sports. All in all being an entrepreneur is a calling, not a job, and I feel fortunate to apply myself to areas where I am passionate where I can always learn new things from customers, partners, investors and members of our team.

Creating a Great Culture -- Your Company's Foundational DNA

Building on my last post, which discussed challenges in building great teams, I shared examples where dysfunction can occur despite everyone has the common goal of caring deeply about the company’s success. Let’s pick up where the last write-up left off: building your company’s culture and how doing so can provide the support system of trust and respect. This is critical to ensuring your teams have the best tools to work through healthy conflicts in a safe surrounding, and to accelerate their time working on priorities that will drive the greatest results.

So what is ‘culture’ at a company, and when does it start developing? A company’s culture begins with its founders – what they believe in, what they value and how they work. When it comes to culture creation, all leaders have ‘baggage’, remember this applies to all of our team members that we hire as well, and we tend to carry those past experiences with us – the good, bad and ugly. Naturally, we want to not repeat things we disliked about past company culture experiences and to carry forward things we appreciated from the past. A new company is also an opportunity to try new approaches to culture – taking things that we learn from others that we aspire to emulate or, ideally, embellish to make our own.

A company culture starts on Day One. As a company expands and matures, the culture will too. But certain values must be there on the first day – part of the company’s DNA. At the time of co-founding AppFirst one of my fraternity brothers from USC, Marc Benioff, Salesforce.comSalesforce.com Chairman and CEO, was just completing his book. He sent me a final draft since the content was not only about cloud computing but the entrepreneurial experiences learned from his journey. In his book Behind the Cloud: The Untold Story of How Salesforce.com went from idea to billion-dollar company – and revolutionized an industry, Marc shares an anecdote of when he worked for a large and well-known Silicon Valley company. During a sabbatical he gained some perspective and wanted to establish a stronger philanthropic culture at the company. Although the company had plenty of resources, both in funds and employees, to make community-based philanthropic efforts successful, when push came to shove many people who had committed to showing up at a community event did not – it was near the end of the quarter and they chose to stay at their desks to push to meet numbers. No doubt they would have been happy to participate in the volunteer program that day, but the company culture was bottom-line based. From that he learned a value like ‘Philanthropy’ was too tall a task to simply tack on. When he started Salesforce.com, he and his founding team all shared the philosophy that “the value of a corporation should be distributed not only to its leadership but also to the communities in which it operates and to the world.” He notes this was discussed on the first day of work and that the Salesforce Foundation was filed as a public charity at the same time that Salesforce.com was incorporated. Talk about establishing a cultural value on Day One! And that cultural value remains today – the Salesforce.com Foundation continues to donate 1% of the company’s resources – time, product and equity – to support organizations that are working to make the world a better place.

“…life is too short to spend a lot of time building companies that don’t reflect core values…” [Tweet this]

So, what kind of company do you want yours to be? Is high turnover OK or do you want to empower amazing people? What will make you proud? How do you measure success? I think life is too short to spend a lot of time building companies that don’t reflect core values and that those core values must support ‘breathing space’ for every employee. Jerry Colonna, a certified professional coach whose background includes venture capital and J.P. Morgan Partners, gave a presentation at a recent CEO Summit on the ‘Crucible of Leadership’. In his presentation he discussed the importance of a culture that embraces more than just the bottom line. If everything is about the job, he says, when something about the job inevitably goes wrong, people break down.

In addition to the cultural values established by a company’s founders on Day One, I have found that the first 10 employees hired are phenomenally important and influential on initial culture, and hires beyond that to the first 50 or so continue to evolve this range of influence. At that point, is the team further shaping the culture? Or is the culture molding the team? This is where the practices around hiring slowly and firing quickly is critical. After setting up your core values from inception, your next challenge is ensuring that the team you have in place not only buys into the core values of the company, but ideally can provide their further enhancements of ideas and values to the evolution of your early culture. The best, most scalable culture is one that is managed and maintained by the majority not by a policing body or culture Czar. Regarding what comes first, it might be a chicken/egg scenario now, but as company founders and leaders, it is part of your responsibility to keep your team healthy and productive. To accomplish this you must never lose sight of the cultural fundamentals of trust and respect, two values that must be part of your company’s cultural DNA.

“…the best, most scalable culture is one that is managed and maintained by the majority, not by a policing body or culture Czar…” [Tweet this]

This might sound surprising but I have found that many people are not ready for high trust environment where bad news needs to travel fast. The first time I learned this was four start-ups ago when a very bright prospect we were recruiting made it clear that they could not work in an environment that required full trust. Their comment was fair and telling…”my entire childhood I was punished whenever I made a mistake so trusting that I can share a problem and not endure the wrath of my boss or peers is incomprehensible.” This person was a great talent that turned out to be a non-fit for our first ten employees as she was not ready for the leap of trust, though it was clear she wished she could join a firm with such great mutual respect…but it comes with a price and a risk that every employee needs to be ready to take.

The Core Values of AppFirst are central to who we are and what we want the company to be. They are on a huge poster titled ‘Rules of the Loft’ and the first thing you see when you enter our office. We are Customer-centric, We give back, We want to have fun at work, We put people first – we trust, value and respect everyone’s opinion and live by the ‘golden rule.’ By making these our core values, every employee has a platform to share an opinion, because if an employee is standing up for what they perceive as the betterment of the company and it’s getting our customers what they want and need, then we want to hear it. Not every opinion may be embraced, but because transparency is built into our cultural DNA, the person who voiced it doesn’t feel like they ‘lost,’ they get on board with the rest of the team rather than create dysfunction. We had a person that didn’t work out at AppFirst because they felt they couldn’t live up to the Rules of the Loft. We wished this person well, and sent them on their way.

Another important thing I’ve learned about transparency: Without it, bad news is avoided, ignored, shoved in a drawer. Lots of people are taught to ignore or hide mistakes and without transparency in your company culture, they fester. It’s better to have a culture that encourages the acknowledgment of mistakes and gives everyone the opportunity to learn from them. Don’t get me wrong — everyone on our team knows making the same mistakes is unacceptable, but they also know that a person making no mistakes is likely doing so because they are taking no risks and likely accomplishing nothing toward the firm’s innovation.

Remember that your company is a living, changing, growing entity. The culture will shift as it’s tested, as more employees are brought on-board. With everyone focused on the company’s success, getting the product out the door, making sure the customer is happy, it’s easy to take the culture part of things for granted. But find time, on a regular basis, to reinforce your company’s cultural attributes. If you have a core value of giving back to the community or supporting employees who want to expand their skill-set, make sure time and resources are made available to do it. It may not ‘seem’ like a critical component, but books are written and consultants are making plenty of money re-aligning cultures that are destroying companies. Establish and create a culture that makes you proud of what you have created, and you will attract a team that shares those values. Start with Trust and Respect, and your employees will be part of something they feel good about and will support the company with tremendous loyalty.

Post Your Comment

Post Your Reply

Forbes writers have the ability to call out member comments they find particularly interesting. Called-out comments are highlighted across the Forbes network. You'll be notified if your comment is called out.

Comments

Culture is so important, especially with the infusion of Millennials into the workforce. When coupled with the expansion of technology, its the significance of a rich culture that allows an organization to successfully collaborate and innovate. With its tech-fueled upbringing generation of anywhere, anytime, any device professionals has a lot to offer any organization, however they also have a lot to learn as well. How companies facilitate the transfer of knowledge rests with how well they nurture their culture.

Creating a culture absolutely starts from day one and continues throughout the life of the company. For a culture to truly take root however, it’s essential that every new hire understands the dynamics of the organization. Taking the time to ensure new employees understand a company’s values, morals and goals may seem unimportant at the time, but the long-term effects are immeasurable. Employees that are invested in a company’s culture are committed to the organization, invested in the dream and willing to do whatever it takes to help the company succeed.

I recently attended the Daily Herald Best Places to Work in Illinois in 2012 ceremony, and all of the companies honored had unique, dynamic cultures that put their employees first. I share more about their cultures in my blog post: http://pastfive.typepad.com/pastfive/2012/05/the-best-places-to-work-put-employees-first.html

Nicely written post David. I agree that every company needs and should have a culture. in my experience with the companies I know they all have a culture that can be described close to the ones you have mentioned at appfirst. you cannot go wrong with a culture (trust, respect, empowerment, people, community, customers, etc.,) that is as good as motherhood and apple pie. I would argue that it is hard to find a company that does not have one or two of the listed in their culture tagline. But how do you measure it is in their dna rather than tagline.

I appreciate all of the comments and also welcome ideas from everyone on future topics of interest. Per your comment about feeling like culture statements can sound like “motherhood & apple pie” or hard to measure, I have found that it’s actually very measurable. It starts by the actions people take that matters the most & is very measurable. First a company can & should establish personal & team objectives that encourages actions to map to the ideals. For example in Salesforce.com they provide employees with days off dedicated to philanthropic activity that is completely independent of their vacation or sick days. How a firm handles actions violating trust or respect for one another is also measurable in actions, in my previous post I shared a story that described an example that successfully tested our culture. Net net for me is that for it to become in the DNA it needs to map into the actions that the leadership in the company demonstrate but equally important is how the actions are measured & engaged on a peer to peer basis. Obviously in very large corporations this takes on a completely different level of complexity where some firms attempt to maintain one company culture even after merging in numerous companies to other firms that I have seen manage a rainbow of subcultures where each acquired company maintains autonomy not only of their business operation but their culture as well.

Risk practitioners generally fail to address the underlying human aspect. Since the publication of the Basle accord, ISO 31000 and other standards and regulations, it has often been argued that compliance with these standards and regulations will mitigate and control risk, but this is only true if the standards and regulations are embraced in an effective Enterprise Risk Management Culture. Just like the policies, procedures and systems, these are worthless if human attitude, acceptance and desired response lack.

Addressing the aspect of people risk is the only way an organisation can improve the way their people respond to a situation of risk and the effectiveness of their risk management function. No organisation can ever have a perfect risk management culture, but organisations can achieve a level of maturity where they have an effective risk culture process and every employee is risk-minded and does something on a daily basis to mitigate, control and optimize risk

The development of Risk Culture Building is focused on awareness and training in business ethics and human behaviour, both the behaviours we want to encourage and the behaviours we ant to avoid. Organisations should frequently evaluate the progress (or regress) they are making on the path to maturity and implement action plans

Risk Culture Building is the process of growth and continuous improvement in the way each and every person in an organisation will respond to a given situation of risk as to mitigate, control and optimize that risk to the benefit of the organisation.

No two people will respond the same way to a situation of risk, the way any person responds to risk is influenced by a number of factors, the main ones are: